Question

Study the information given below to answer these questions.
Mr. Kunal Dwivedi wants to buy a motorbike which is priced at Rs. 45,000. The bike is also available at Rs. 25,000 down payment and monthly installments of Rs. 1000 per month for 2 years or Rs. 18,000 down payment and monthly instalment of Rs. 1000 per month for 3 years. Mr. Kunal has with him only Rs. 12,000. He wants to borrow the balance money of the down payment from a private money lender whose terms are :
If Rs. 6,000 is borrowed for 12 months, the rate of interest is 20%. The interest will be calculated on the whole amount for the whole year, even though the repayment has to be done in 12 equal monthly instalments starting from the first month itself. Thus he will have to repay an amount of Rs. 600 per month for 12 months to repay Rs. 6000 (Principal) + Rs. 1,200 (Interest @ 20%).
If Rs. 10,000 upwards is borrowed for one year, the rate of interest is 30% and is calculated in exactly the same manner as above.